By Faridah N Kulumba
Africa-Press-Kenya As the countries are still struggling with the Covind-19 pandemic effects since the year 2020, the world is now faced with a great crisis that seems to dwarf all others since the second world war the Russia-Ukraine conflict. Last week on 21 March, the government of Kenya revealed that the ongoing war in Ukraine will affect the economic growth of the country. The month-long war broke out in Ukraine after Russia invaded Ukraine.
Russia-Ukraine contribution to Kenya
Russia and Ukraine bear significant contributions to Kenya’s economy due to the fact that both nations carry a huge percentage of wheat production in the world. Russia contributes 10 percent while Ukraine is 4 percent. Kenya finds itself in this geopolitical.l conundrum that adversely affects the global agricultural market since Kenya imports a great deal of wheat from the two countries. In 2019, wheat importation from Russia and Ukraine stood at Ksh,11 billion and Ksh,5 billion respectively.
The prices of wheat are likely to go up which will affect Kenyan households since wheat remains the third most consumed food commodity in this country.
Disruptions
The revelations were made during a briefing between the National Development Implementation Coordination and Communication Committee (NDICC) and development partners from various foreign countries. According to the Kenyan government, the war is disrupting the export-import supply chain which could especially affect fuel prices. The increase in fuel prices will touch nearly every service delivered and each product produced and distributed.
Tea
Russia is the fourth-biggest buyer of Kenya tea, having taken up produce worth Sh6.2 billion in the 11 months to November. With the war still going on, this will affect the Kenyan economy since agriculture is the backbone of that nation.
Kenya and Ukraine trade relations
Kenya and Ukraine established bilateral ties on 5th March 1993, the same day Kenya recognized Ukraine as an independent nation. The two nations are partners in trade, economic, military-technical, and culture. In 2013, Ukraine exported goods worth Ksh.13 billion (USD143 million) to Kenya. Whereas Kenya exported goods worth Ksh.925 million (USD 10.1 million).
Ammunitions
Ukraine is a major arms supplier to the Kenya Defence Forces (KDF). In 2008, Kenya purchased 33 Soviet-era T-72 tanks from Ukraine. For a long time, the Kenyan government has been persuading Ukrainian investors to invest in infrastructure, tourism, Information Communication Technology (ICT), mining, and the emerging oil and gas sector.
Kenya-Russia trade relations.
The two nations established diplomatic relations on 14 December 1963, and they have maintained good relations to date. According to the Russian Export Centre, in 2018, Kenya and Russia’s bilateral trade ties reached a total of Ksh.12.85 billion (USD124 million) and Russia exported goods worth Ksh.22,37 billion (USD216 million) to Kenya. The main goods Russia exports to Kenya are cereals, iron, and steel. Fertilizers and paper. On the other hand, Kenya mainly exports cut flowers, coffee tea, fruits, and vegetables to Russia.
Sanctions effects
Kenya’s exports of tea, flowers, coffee and fruits to Russia were derailed in the wake of sanctions imposed on Moscow by Western nations after its invasion of Ukraine, hurting local smallholder farmers. The blockade of the exports, estimated at nearly Ksh.10 billion (USD7.5 million) annually, followed major container and shipping lines temporarily suspended cargo shipments to and from Russia in response to the sanctions. Excluding Russian banks from SWIFT, the international payment, and its central bank from operations made it harder for the country to pay imports and receive exports.
War fears
2022, being Kenya’s general election year, the country is already prone to face strain as many funds from public coffers somehow find their way for usage on the campaign trail. It leaves little funds flowing into local citizens’ pockets for expenditure, much less to pump into savings and investments. If the war in Ukraine lasts for long Kenya’s economy will greatly be affected. According to Kenya’s econometric models, the country’s GDP is projected to trend around 107.00 USD billion this year and 110.00 USD billion in 2023.
